James Hurst, Kirkland & Ellis (Photo: Todd Winters)The notorious 100-plus patent thicket that AbbVie Inc. planted around biologic drug Humira—and the company’s deals with competitors to enter the market—do not run afoul of federal antitrust laws.
So ruled U.S. District Judge Manish Shah of the Northern District of Illinois in what’s being called the first decision on “pay to delay” allegations in the biosimilar market.
The decision appears to cement AbbVie’s hold on the U.S. market for Humira, which rang up sales of more than $56 billion in the United States between 2012 and 2018, until 2023.
Lawyers bringing a class action on behalf of indirect purchasers argued that AbbVie had unfairly negotiated a quid pro quo with biosimilar makers such as Samsung Bioepis Co. Ltd., Amgen Inc., and Sandoz Inc. The deals called for entry into the European market in 2018 in exchange for introduction to the U.S. market starting in 2023. “AbbVie’s motive was to keep prices in the U.S. artificially high for as long as possible,” Shah wrote in a 72-page order, paraphrasing the complaint in the case. “It succeeded: the cost of Humira to treat arthritis in the U.S. remains 50% more expensive than the cost of the same treatment in Spain (and 155% more expensive than in Switzerland).”
But that doesn’t make it anti-competitive, Shah concluded. Although the Supreme Court ruled in 2013 that cash payments in exchange for delayed entry can be illegal, entry into a foreign market is not. That’s especially true here, Shah wrote, where AbbVie arguably was giving up some of the time it had left on some patents in each market.
“The transfer of value, as large as it was, did not have the hallmarks of an unjustified and otherwise inexplicable payment because the package either increased competition or preserved an anticompetitive status quo,” Shah wrote in rejecting plaintiffs’ Section 1 claims under the Sherman Act. “The effect of the payment was to increase, not restrain competition by bringing competitors into the market when patents otherwise prohibited the competition.”
The plaintiffs, labor unions who operate health benefit plans, argued that the AbbVie patents are weak, and without the carrot of 2018 entry into Europe, the biosimilars would have been more motivated to invalidate them in court. But Shah found that Abbvie’s success at obtaining 132 patents from the PTO for 247 total applications, and the USPTO’s decision not to entertain 13 out of 20 post-grant challenges, prove that AbbVie’s patents are not a “sham,” and therefore protected by the Noerr-Pennington doctrine.
Kirkland & Ellis partners Diana Watral, James Hurst and Damon Andrews signed the defendants’ motion to dismiss for AbbVie. O’Melveny & Myers partners Ian Simmons, Benjamin Bradshaw and Stephen McIntyre and associates Kurt Brown, Brian Quinn and Patrick Jones represented Samsung Bioepis along with Riley Safer Holmes & Cancila partners Thomas Quinn, Ronald Safer and Sondra Hemeryck. Sidley Austin partners Bruce Braun, David Giardina and Steven Horowitz represented Amgen. Sandoz was represented by Baker Botts partners Stephen Weissman, Michael Perry, William Lavery, senior associate Christopher Wilson and associate Elisa Beneze.
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June 09, 2020 at 07:20AM
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